Amidst news of a currency shortage in Nigeria, the Central Bank of Nigeria (CBN) has issued a cautionary message to Nigerians, urging them to exercise caution and remain vigilant against the circulation of counterfeit naira notes. The central bank issued a statement on December 8, 2023 warning about the presence of fake Nigerian currency circulating in the market. To prevent any potential harm, the apex bank urged banks, financial institutions, exchange bureaus, and the general public to stay alert and adopt precautionary measures.
Also, law enforcement agencies are collaborating with the Central Bank in order to capture the individuals accountable for distributing fake money, as confirmed by the bank to the general population. Counterfeit banknotes of considerably larger denominations have been observed to be in circulation by certain persons within major cities, deployed for transactions within food markets and other commercial hubs. This awareness has prompted the Central Bank of Nigeria to issue a statement addressing this issue.
Falsifying bank notes attract 5-year jail term in Nigeria.
To clarify, it is important to note that Section 20(4) of the CBN Act (2007), after being amended, explicitly specifies that anyone caught falsifying, producing, or replicating any bank notes or coins issued by the Bank of Nigeria, which have legal value in the country, will be committing a crime and subject to a minimum prison sentence of five years. The CBN never ceases to work together with pertinent security and financial organizations in order to seize counterfeit naira banknotes, as well as apprehend and bring counterfeiters to justice.
Citizens are urged to promptly notify the closest police station or branch of the Central Bank of Nigeria if they have any suspicions regarding individuals possessing counterfeit naira currencies. In the statement, it is emphasized that the entire public, including Deposit Money Banks, Financial Houses, Bureau de Change, and individuals, must heighten their awareness and adopt essential preventive actions to effectively curb the acceptance and circulation of counterfeit currency. This may include the various ways that individuals check for genuine notes or the use of counting machines in banks.
Nigeria’s apex court had extended validity of former naira designs.
According to the media, a recent judgment by the Supreme Court indicates that the naira’s previous denominations of N200, N500, and N1,000 notes will remain in circulation alongside the new notes until further instructions are provided. The recent court ruling decreed that, until the Federal Government collaborates with pertinent stakeholders to establish a proper replacement or redesign process, both the old and new notes must continue to be recognized as legal tender even after December 31.
On March 3, the highest court issued an order preventing the Central Bank of Nigeria from implementing the deadline regarding the utilization of outdated currency notes. The old N200, N500, and N1,000 notes had their validity indefinitely extended by the CBN on November 14. If the court did not step in, the situation of scarcity which happened just before the general elections would repeat itself. And this will most likely result in untoward reactions such as protests, robberies, and even widespread chaos.
Counterfeit money affects the country’s economy.
The high incidence of fake money can result in increased expenses for measures against counterfeiting, affecting both businesses and financial institutions. At a larger economic level, the broad dissemination of counterfeit currency can contribute to inflation, disturbing the equilibrium between supply and demand in the economy. Authorities are forced to allocate resources to combat counterfeiting, diverting funds from productive ventures. Ultimately, the repercussions of counterfeit money go beyond single transactions, infiltrating the economic foundation and posing a threat to financial stability.
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